Audit Threshold Changes Are Coming to Wisconsin
On March 21, 2024, Wisconsin-based nonprofit organizations received some wonderful news and relief on their assurance requirements for attachment to Wisconsin Form 1952.
Assembly Bill 912, also known as 2023 Wisconsin Act 151, was enacted — which increased the audit threshold from $500,000 to $1 million in annual contributions. Charities with annual contributions of at least $500,000 but less than $1 million may now submit reviewed financial statements. Below are a few things to keep in mind when considering these changes:
- This change is not to be applied retrospectively and affects fiscal years that begin on or after March 23, 2024 (or March 31, 2025 year-ends and going forward).
- These assurance threshold changes have no impact on tax and Form 1952 filing requirements.
- There was no change in how to calculate annual contributions to determine assurance needs. This still includes contributions, grants, and certain in-kind contributions. It does not include government grants.
- While state assurance thresholds may have changed, that doesn’t necessarily mean changes to granting or funding agencies’ assurance requirements.
For example, the Department of Health and Human Services and the Department of Children and Families have their own audit thresholds in that if a nonprofit organization “expended or received more than $100,000 in funding,” they are required to meet additional audit and program-specific compliance requirements.
Nonprofit organizations should review their funding agreements closely to maintain compliance with funding agency requirements. It’s possible smaller nonprofit organizations may be exempt from state assurance requirements, but may be required to have an assurance engagement due to certain funding expended or received. These assurance threshold changes, coupled with the recent changes to single audit requirements, could help many nonprofit organizations save money on assurance requirements and put those dollars back into serving their missions and communities.
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